Trump Wants Big Tech to Pay for Power
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What is the main topic discussed in this episode?
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Donald Trump is rewriting the Washington rulebook and reshaping the global economy. If you're trying to connect the dots behind the headlines, Bloomberg's Trumponomics podcast is here to help. I'm Stephanie Flanders, head of government and economics at Bloomberg. Every week I'll bring you a smart, focused conversation with reporters and experts from Washington, Wall Street and beyond. Listen to new episodes every Wednesday and follow Trumponomics wherever you listen.
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This is Bloomberg Tech. Coming up, Bloomberg reporting President Trump moves to have tech companies pay for surging energy prices following the rise of AI data centers. Plus, AI coding startup Replit could hit a valuation of $9 billion in a new round of funding. We have the details. And we'll be joined by the chairman of the Federal Trade Commission for a conversation on antitrust, consumer protection, and AI regulation. That is later this hour. Our top story. The Trump administration and governors from northeastern states are taking an unprecedented step to get tech companies to pay for surging energy prices as data centers gobble up more electricity. The administration will direct the country's largest grid operator, PJM Interconnection, to hold an emergency power auction.
That's according to a White House official. Those companies will be able to bid on 15-year contracts for new electricity generation which could support potentially $15 billion worth of new power plants to fuel the AI boom, also according to the official. Bloomberg Senior Tech Editor Mike Shepard joins us now. What do we need to know here, Shep? I mean, this is very much in the consciousness of this administration, but also at the forefront of what the hyperscalers are thinking about too.
Well, it really is.
In a lot of ways, while the administration is trying to find a way to make the tech companies pay for some of this new power that they would need to sustain and keep the AI boom going, they are also giving the tech industry in large part, especially the biggest companies, the hyperscalers. what they wanted. They are willing to pay for some of that extra power generation, but they need somehow the wherewithal from the grid operators themselves to add that infrastructure. So this would provide some stability in the funding, and it would also provide a slug of money for the grid operator, in this case PJM Interconnection, to start laying the groundwork for some of that infrastructure. What's interesting about this is PJM actually runs these kinds of so-called emergency auctions on a somewhat regular basis, and they almost have one in the pipeline for this very need, for the question of data centers, but they usually go on 12-month intervals.
not 15-year intervals. So this really would provide pricing stability for those buyers. Now, one other question, though, Ed, is how the grid operators will proceed with this. And PJM was not invited to the White House event. We are expecting an announcement shortly from Interior Secretary Doug Burgum and Energy Secretary Chris Wright. And it's unclear exactly how enthusiastically they will be embracing this. The other big news overnight, the United States and Taiwan have reached a deal to lower tariffs on some goods, but critically cooperate and co-invest in semiconductor capacity. What do we need to know there, Mike? Well, what's really key in this deal is that not only are we seeing the tariff rate on goods from Taiwan drop to 15% from the current 20%, just as importantly, we are seeing the outlines of a much more significant investment
in American semiconductor manufacturing. And the announcement from the White House didn't name any names in terms of companies, but you and I, our heads, are gonna go right to Taiwan Semiconductor Manufacturing Company.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:00–5:59
2
What is the White House plan to make tech companies pay for rising energy costs from AI data centers?
5:59–8:28
3
How would a PJM emergency auction and 15-year contracts work to finance new power plants?
8:28–21:01
4
What impact could the US–Taiwan semiconductor cooperation have on chip capacity and investment?
21:01–30:00
5
Why is the memory bottleneck critical for AI data centers and semiconductor markets?
30:00–50:09
Speakers
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